Laid off prison workers cheated out of benefits and denied public redress

25 February 2009

During the state-owned enterprise (SOE) reforms of the late 1990s and early 2000s in which tens of millions of workers lost their jobs, some public institutions and government bodies also tried to jump on the reform bandwagon and sought government funds to facilitate lay offs of their own.

Technically, this was in contravention of central government regulations which restricted lay-off funds to SOEs alone, but some public institutions managed to manipulate the process so that they could lay off manual workers within their organizations. And just like their counterparts in the SOEs, these workers in public institutions were often cheated out of their due benefits and then systematically denied administrative and judicial redress. For more details see CLB’s research report No Way Out: Worker Activism in China’s State-Owned Enterprise Reforms.

In October 2008, CLB Director Han Dongfang talked to Li Min, a former worker at Hulan Prison, the largest jail in the northeastern province of Heilongjiang, about how 70 employees were laid off in 2003 and subsequently lost their social security, medical and unemployment benefits. The workers filed petitions and lawsuits in an attempt to reclaim their due benefits but all to no avail. Eventually they picketed a local government office but were attacked by a group of thugs as the police stood by and watched.

In 1999, the prison leaders demanded that workers sign fake layoff contracts so that they could obtain laid off worker compensation funds from the state. According to Li Min, a boiler operator in the prison at the time, these fake contracts brought the prison 170 yuan for each worker’s monthly base wage of 353 yuan. Li said most workers went along with the scam because they were told by management:  “the higher-ups have intervened and you won’t be laid off, but you will be sent home if you don’t sign it.” The few who did not sign were indeed sent home. “It was like killing a chicken to scare the monkey,” he added. Although the workers knew the prison was taking layoff money Li asked: “What could we do about it? With the way officials have protected each other these last few years…what could we do to them?...we needed to make a living!”

Forced to retire

The following year, 2000, the entire prison, originally located in Gezhi, moved to Hulan district outside Harbin, and the workers relocated. The employment situation remained stable until February 2003 when the prison leadership cajoled the workers into signing another lay-off contract. This time the workers really were laid-off, with those close to the retirement age receiving “nothing at all” in terms of social security, health insurance, or unemployment insurance. The prison leadership then added insult to injury by hiring new people, said Li. “They didn’t use their own workers, and they hired people from outside based on their personal connections!” Li believed that some new hires were paid without actually going to work. The boiler room duties, said Li, were eventually contracted out but some of the original workers who had good connections were able to stay on.

Prison leaders claimed they had to make the layoffs because they had received a document from the local Labour Bureau stating that, in future, there would be no “workers” at prisons just “cadres” (managers, guards, and other similar positions), and that the prison should lay off existing “workers” (canteen staff, manual labourers etc).

At the time, Li said, the workers at Hulan Prison were owed between 6,000 and 10,000 yuan in back pay. “We were paid about four or five months wages each year when we were at the prison,” said Li, who calculated that he himself was owed about 15 months’ worth of back wages. The workers were promised their back wages - at a time when the prison could afford to pay them - if they signed the layoff contract. They were also promised a redundancy lump sum payment based on 10 percent of their wages, multiplied by the number of years they had worked at the prison. These amounts were indeed quickly paid out to the workers soon after they were laid off. Li himself received a total of about 9,000 yuan, after the prison deducted an amount Li owed them for a loan he had taken out to purchase a house.

Left out in the cold

Despite receiving a compensation package from the prison, Li and his colleagues soon discovered they would get nothing else. The prison had only provided social security from 2000 to 2003; with the prison paying 78 percent and the workers 22 percent of the contributions. After being laid off in 2003, the workers had until 2005 to pay the full amount of their social security contributions dating back to their first year of employment to the prison, which would in turn transfer it to the relevant government bureau. But in 2005 the prison told the laid-off workers their relationship with the prison would be severed and that they would have to pay their contributions direct to the social security department however no office was willing to accept their money.

When the prison workers were laid off, they were told they were being “pushed back into society.” But Li said: “To this day we have not been connected to society. We have nowhere to get social security; we have no health insurance, nothing at all, no benefits at all. How are we supposed to live?” Li’s local social security office told him that he had no relationship with them without the employment relationship to the prison. “It is like being a child with no father or mother,” he said.

After being laid off, Li began to work as a temporary labourer. “Whatever hard, tiring work there is, you have to do it so you can eat and support your family,” he said. Though he currently earns about 1,000 yuan per month, he has no social security or health benefits. In addition, there are other household expenses such as heating, once 90 percent subsidized by the prison, that are now 100 percent paid by Li and the other workers. Winters in Harbin are long and frigid with average temperatures around -17 degrees Celsius.

In 2004, when it became clear they would not be getting their old jobs back, Li and several others began to petition the local authorities but after being continually referred from one department to another they came away empty handed: “We went through all of the procedures,” said Li, but “we didn’t see one high official.”

Let down by the courts

Exasperated, in 2007, the laid-off workers hired an attorney and filed a civil lawsuit alleging the prison had deceived them during in the layoff process. The suit demanded the social security, medical, and unemployment insurance owed the workers from their period of employment prior to 2000. The workers asserted that their relationship with the prison had not been legally severed and demanded living expenses from the present time onward to help them get by, as well as a continuation of the “three insurances.” A hearing was held but, after 16 months of silence, the Hulan District People’s Court announced in June of 2008 that it would not accept the prison workers’ case because it did not qualify as a civil suit. Li asked the court, “How can you not accept our case after you accepted it for a year and four months?” Li and his coworkers appealed to the Intermediate People’s Court which, after two more months, upheld the original decision not to adjudicate the case. Li said that it appeared that the Reform-through-Labour Bureau, the body governing Hulan Prison, had pressured the court into dropping the case.

While awaiting the first court decision, the workers pooled their money and sent three representatives to take their complaint to Beijing in May of 2008. But officials in the central judicial and reform bureaus told the workers to take their case back to the Heilongjiang provincial government bureaus and courts to negotiate a resolution.

In June of 2008, Li and ten female laid off workers went to the provincial Reform Bureau, as suggested by the authorities in Beijing. They were denied entry, and the group bought some food and returned to the entry gate to eat it while waiting to be allowed in. A dispute erupted between the women and the gate guards after the guards kicked over their food containers. A taxi then arrived and four men got out, who proceeded to beat Li, the only male in the group. “They hit me four or five times on the head and then ran off.” The beating was severe enough to for Li to momentarily lose consciousness but the police officers standing nearby not only didn’t intervene, they simply stood by laughing.

Li’s coworkers took him to the hospital but before leaving, he asked the police, “You are public servants… but are you worthy of being public servants when you stand there and are entertained by citizens being harmed?” A senior prison official, who had seen what happened but did not intervene, went to the hospital and offered Li 500 yuan (apparently out of his own pocket) to pay the hospital fees, which Li grudgingly accepted (later, the official sent someone to ask Li to repay the money).

A new director of the Reform Bureau’s Office of Complaints and Petitions told Li that the beating had nothing to do with their office and he should file a case with the police. Although the local police station took Li’s statement, they refused to take further action.

Li and his co-workers are thoroughly disillusioned by the whole process but are determined to push on. Li said that they would “take this to the end; we have no other choice. Whatever avenue is open to us, we will take it. I don’t want to suffer a beating for nothing…even if there is no hope, I must continue to pursue this.” 


Han Dongfang’s interview with Li Min was broadcast in seven episodes in October and November 2008. To read the full Chinese transcript or listen to the audio file of the broadcast please go the workers’ voices section of our Chinese language website and follow the links.

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